Automated plan features in 401(k)s such as auto-enrollment and auto-escalation have become essential tools for boosting employee participation and contribution levels.

Marc Howell and Felix Okwaning, who are both Managing Directors—Enhanced Plan Design at Principal Financial GroupⓇ, share some compelling new research showing employees not only stay in auto features but increasingly expect them, explore budget-friendly strategies to implement them, and discuss how failing to act can create costly delayed retirements. We’ll also cover how SECURE 2.0 is accelerating adoption of automation, and why advisors and sponsors should prepare for auto features to become standard in every retirement plan.

Key Insights

Auto Features in 401(k) Plans Drive Better Retirement Outcomes
Marc Howell and Felix Okwaning emphasize that automatic enrollment and automatic escalation remain the most effective tools for improving participant savings behavior. These features increase plan participation and deferral rates, leading to higher retirement readiness—especially when combined with target date funds.

Cost Concerns Are Often Overstated
Many plan sponsors hesitate to implement auto features due to perceived cost concerns. However, the speakers argue that these assumptions are often exaggerated. When designed strategically, auto features can be cost-neutral—or even reduce costs—by increasing plan scale and efficiency over time.

Behavioral Nudges Require Strategic Plan Design
The speakers highlight the importance of behavioral finance in retirement plan design. Default options, re-enrollment, and ongoing communication can gently steer participants toward smarter decisions. Plan sponsors are encouraged to revisit plan design annually to ensure features align with evolving participant needs and business goals.

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